Top fintech startups contributing to financial inclusion

15 November 2017

A great number of people across the globe have little to no access to conventional financial services, provided by banks and credit unions, leaving them with restricted access to commercial activity based on electronic transactions, as these customers have no bank accounts and credit cards and have to rely exclusively on cash. Financial technologies disrupt conventional markets expanding the view of companies to reach out to previously untrod consumer sectors with high cash potential. These are top fintech players, which make financial services accessible for everyone.

TransferWise

This is our favorite startup. Launched by Estonian entrepreneurs Kristo Käärmann and Taavet Hinrikus just 6 years ago, TransferWise has become one of the largest London-based fintech startup companies. TransferWise was included into the list of East London’s 20 hottest tech startups by the Guardian and ranked No8 by CNBC on its 2015 Disruptor 50 list.

This international money transfer services provider has turned the remittance industry upside down, enabling users across the globe to send and receive international money transfers at lower costs in light of no currency exchange charges.

TransferWise matches the amounts sent and received, eliminating the need for customers to convert their currencies. Thus, if some user sends $100 from the United States to Japan, and there is another user sending equivalent of $100 from Japan to the United States, recipients will get their money not from the original senders, but from those initiating the equivalent transfer.

Kreditech

This Hamburg-based online lender is a truly innovative startup as it changes the way how we used to perceive the loan provision process. Kreditech, founded by German businessmen Sebastian Diemer and Alexander Graubner-Müller, enables access to financing for underbanked people, whose loan applications are usually denied by traditional financial institutions on the grounds of their empty credit history.

Kreditech is using technologies that analyze consumer data from the social networks, online shopping habits, hardware and software information, general online behavior to establish their creditworthiness instead of relying on their past borrowing activity.

Rene Griemens, working as a chief financial officer at Kreditech, noted: “Historic behaviour may be an indicator for the future, but for most people it’s not, because for most people a better indicator is how they are behaving nowadays and how this is likely to develop.”

Abra

Abra makes financial inclusion even more convenient and faster, as it enables anyone with a smartphone to send and receive money without a need to hold a bank account. Abra was founded by former Goldman Sachs software engineer Bill Barhydt in 2014 for providing consumer peer-to-peer mobile payment services across the United States and the Philippines.

Using a mobile wallet and a dedicated network of Abra tellers, customers may perform a host of operations from depositing cash to transferring money on any Android or iOS device. Abra does not keeps user’s money on its accounts, all cash is stored on the device as Abra is using Bitcoin and its blockchain network for storing and encrypting deposits made by its customers.

Abra tellers are human ATMs, which means that instead of dealing with traditional machines, users go to other individuals or business owners to deposit or withdraw money. There is no need for people, having little understanding of what Bitcoin or other cryptocurrency, to obtain special knowledge or learning. They just convert their banknotes into digital cash when depositing money on their mobile wallet and perform the opposite process when they withdraw their funds.

Pockit

Founded in 2009 by Virraj Jatania and supported by Sir Alex Ferguson, a former Manchester United manager, Pockit targets the world’s poorest people providing them with bank services and prepaid cards representing their current accounts. Pockit works with UK customers shut out of traditional banking services in light of various reasons, those reasons unnecessarily should be their immigrant status in the UK. People apply to Pockit may be business owners, who suffered bankruptcy or individuals living the districts, which banks do not like.

Application acceptance rate at Pockit is 100%, which means that anyone may come to Pockit and open an account, following the registration process that usually takes about 2 minutes. After the account is opened, applicants are verified, however, and checked. Pockit charges just 99 pence for creating a bank account and a 99 pence fee per transaction, such as cash deposit or withdrawal.

Seedrs

This is another unique startup in the fintech market that was founded in 2012 within the framework of a MBA thesis prepared at Oxford Said Business School by Jeff Lynn and Carlos Silva. Seedrs aims to bring fund raising capability to entrepreneurs with limited opportunities to get conventional financing from large investors. Seedrs was also included into the list of East London’s 20 Hottest Startups by the Guardian and recognized as The Best Crowdfunding Platform 2017 by Shares Magazine.

Seedrs is actually a crowdfunding platform based on the equity, allowing anyone to invest as little as 10 pounds or 10 euros into any startup campaigning on its platform, while providing business owners to raise funds from their friends, family members, venture capital firms in exchange for equity in the future company. It was the first crowdfunding startup to receive authorization from the Financial Conduct Authority (FCA) in the United Kingdom.